Withholding Taxes: Maryland

Summary

Income tax withholding rules differ depending on whether an employee is a Maryland resident, nonresident, or works for the employer in a state that does not have a reciprocal withholding agreement with Maryland. SeeWithholding on Residents, Nonresidents and Expatriates.

When hired, all employees must complete and submit to their employer a state withholding exemption certificate. The spouse of a military servicemember may be exempt from Maryland income tax withholding on income from services performed in Maryland if certain conditions apply. SeeEmployee's Withholding Allowance Certificate.

A special withholding rate applies to payments of supplemental wages, such as bonuses. SeeSupplemental Wages.

Employers must provide federal Form W-2, Wage and Tax Statement, to each employee annually. In addition, employers must provide electronic or written notice to employees who may be eligible for the state Earned Income Tax Credit. SeeForm W-2 Requirements; Earned Income Tax Credit Notices.

Employers must keep all records pertaining to the payment of wages and the deduction and withholding of Maryland income tax for a certain number of years. SeeRecordkeeping Requirements.

In addition to withholding for state income tax, Maryland employers also must withhold for county income taxes. All counties in Maryland, and Baltimore, impose a county income tax. SeeLocal Payroll Taxes.

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